The September 2004 issue of PERC Reports is now on the Web, the PDF version and individual HTML articles. The Property and Environment Research Center's monthly magazine offers market-based solutions to environmental problems. This month, the magazine takes on the enviro-claim that we're running out of oil.
The logic behind mineral-resource pessimism is simple. It goes like this: Oil is a finite resource, incapable of being reproduced in human time frames. Any usage reduces the stock, and geometric demand growth, such as the 1.9 percent annual increase in oil demand predicted for the next two decades (U.S. EIA 2004a, 167), will rapidly deplete remaining supplies. Fixed supply plus rising demand equals depletion and increasing economic scarcity
"But look at the data," expansionists respond. The resource base for different minerals has expanded tremendously over time to meet growing demand-and at steady, and even falling, prices when adjusted for inflation. Resource availability has been positively, not negatively, correlated to consumption when human ingenuity has been allowed free rein.
Robert Bradley Jr. offers plenty of other hard facts to serve up to any alarmists you may run into, including this anecdote:
The expansionist position is often associated with Julian Simon, who in 1990 won the most famous wager in the history of economics. He bet Paul Ehrlich, John Holdren, and others that the inflationadjusted price of mineral resources would be less in 1990 than in 1980, and it was. A similar bet undertaken today would likely be a winner, too.
I've often wondered why environmentalists are so upset about us "running out of oil." They hate for us to use oil (what with the emissions and destruction and depletion and various other -tions), so if we start to run short, the price skyrockets, people use less oil because it's more expensive, dreaded emissions go down, and the world devotes more resources to developing alternative energy sources. Voila! The market creates exactly what the enviros want. Just imagine the brow-furrowing you would get from an environmentalist when presented with that argument! But...capitalism...is...the...enemy.
Other articles in the issue:
... topics ranging from recycling in Guatemala to the "anticommons" in fishing management. There's an article about the downside of restoring wetlands -- did you ever think about the mosquitoes they nurture? Our regulars weigh in, too, Linda Platts with "The Greening of Home Depot" and other signs of "Greener Pastures," and Dan Benjamin recounting how California began to regulate groundwater transfers, and why.